Case
No. PAC-E-06-04, Order No. 30199

December
18, 2006

Contact:
Gene Fadness (208) 334-0339

The Idaho Public Utilities Commission today approved a
settlement agreement between PacifiCorp and major customer groups that will
increase revenue to the company by $8.25 million annually, or 5.1 percent. The
agreement does not impact residential rates. The only customers to get an
increase will be irrigation customers (5 percent) and two industrial customers,
Monsanto Company (16.5 percent) and Agrium, also known as Nu-West Industries,
(4 percent).

PacifiCorp, which operates in eastern Idaho as Rocky
Mountain Power (formerly Utah Power & Light), serves about 64,000 Idaho
customers.

The Idaho Irrigation Pumpers Association, Monsanto and
Agrium, all agreed to the settlement. Rate increases for irrigators and
Monsanto are effective Jan. 1, 2007. Agrium rates, by an earlier commission
order, became effective Sept. 1, 2006.

The
settlement prevented the need for PacifiCorp to file a full rate case before
the commission. The commission commended PacifiCorp and all the parties for
reaching the agreement. “We acknowledge that the stipulation … represents a
compromise of party positions,” the commission said.

Irrigators
will pay 5 percent more, increasing revenue for that class by $1.7 million.
However, if irrigators volunteer to participate in the company’s Irrigation
Load Control Credit Rider Program, they will receive a refund after the end of
the 2007 irrigation season. Counting the refund, which totals $450,000, the net
average increase to irrigators is 3.7 percent. The increase to irrigators moves
them $1.7 million closer to the approximate $3.7 million in additional revenue
the company claims is required for the irrigation class to attain full cost of
service.

Rates
for Monsanto, PacifiCorp’s largest customer in its six-state area, increase by
16.5 percent, raising $6.8 million. Monsanto, which operates an elemental
phosphorous plant near Soda Springs, comprises about 43 percent of PacifiCorp’s
electrical requirement in Idaho. Electricity amounts to about one-third of
Monsanto’s total production cost.

A
significant change in the Monsanto rate is the agreement by Monsanto to move
from a contract customer to a tariff customer. That means, as a tariff
customer, Monsanto rate changes will take place simultaneously with rate
changes for other customer classes. Under the current contract, which expires
Dec. 31, rates for Monsanto would change only when a new contract was
negotiated.

Monsanto
also agreed to an increase in the number of hours PacifiCorp can interrupt or
curtail service to Monsanto in order to meet demands on other sectors of
PacifiCorp’s six-state service territory. The hours service can be interrupted
will be 1,000 annually compared to the previous 800 hours. Monsanto agreed to
increase the hours of interruption to offset what would have been a more
substantial increase to its rates as a result of a PacifiCorp cost-of-service
study that concluded the revenue raised from Monsanto was about $13 million
under cost to serve it. The 16.5 percent increase in rates moves Monsanto $6.8
million closer, or more than half way, to full cost of service.

The
4 percent increase for Agrium moves it $150,000 closer to the $428,000
PacifiCorp claims is needed to serve that customer. Agrium produces phosphate
fertilizer at facilities also near Soda Springs.

As
part of the settlement, the Community Action Partnership of Idaho (CAPAI)
agreed not to object to PacifiCorp’s rate application if PacifiCorp also agreed
to initiate a proceeding before the commission to significantly increase the
company’s contribution to low-income weatherization programs. CAPAI is a
non-profit corporation consisting of six community action agencies that fight
poverty. The commission is now considering, under a separate docket (PAC-E-06-10),
whether the company’s policy of funding only 50 percent of weatherization costs
for low-income customers is reasonable.

PacifiCorp
also agreed to a one-time $10,000 contribution from shareholder money to two
community action agencies in eastern and southeastern Idaho to be used for the
Lend-a-Hand program during the 2006-07 heating season. PacifiCorp further
agreed to support legislation sponsored by CAPAI that would give the Public
Utilities Commission authority to approve utility-proposed low-income
assistance programs.

A full text of the
commission’s order, along with other documents related to this case, are
available on the commission’s Web site at www.puc.idaho.gov.
Click on “File Room” and then on “Electric Cases” and scroll down to Case Nos.
PAC-E-06-04, PAC-E-06-08 and PAC-E-06-09.

Interested parties may petition
the commission for reconsideration by no later than Jan 8. Petitions for
reconsideration must set forth specifically why the petitioner contends that
the order is unreasonable, unlawful or erroneous. Petitions should include a
statement of the nature and quantity of evidence the petitioner will offer if
reconsideration is granted.

Petitions can be delivered
to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720,
Boise, ID, 83720-0074, or faxed to 208-334-3762.